Objective. Inflammatory processes in rheumatoid arthritis are primarily regulated by the cytokines tumor necrosis factor α (TNFα) and interleukin-1β (IL-1β). Previous studies in our laboratory have shown that IL-1β represses expression of the cartilage characteristic genes, cartilage-derived retinoic acid-sensitive protein (cd-rap) and type II collagen (COL2A1); this mechanism of repression involves activation of a CCAAT/ enhancer binding protein (c/EBP) site within promoter regions. The aim of this study was to investigate novel TNFα-mediated mechanisms that regulate the expression of cd-rap. Methods. Rat chondrosarcoma cells were transiently transfected with complementary DNA constructs encoding cd-rap, in the presence of TNFα. The expression of c/EBPβ, SOX9, and p300 in rat chondrosarcoma cells and primary human articular chondrocytes after treatment with TNFα was examined by reverse transcription-polymerase chain reaction and Western blotting. The effect of TNFα on endogenous binding of c/EBPβ or SOX9 to the cd-rap promoter was examined by chromatin immunoprecipitation assays. Results. We identified a new c/EBP binding site in the cd-rap promoter (from position -1059 bp to position -1046 bp). Binding of c/EBP to this site was regulated by TNFα but not IL-1β, resulting in down-regulation of cd-rap expression. This effect was reversed by mutational inactivation of the c/EBP motif. In addition, the activation potential of SOX9 and CREB binding protein/p300 on the cd-rap promoter was enhanced after mutation of the new c/EBP binding site, indicating that blockage of this site would increase transcription. Conclusion. TNFα regulates the expression and/or DNA-binding potential of key positive-acting and negative-acting transcription factors that control the expression of the cartilage matrix gene, cd-rap.